The New York Federal Reserve has suspended any new business with MF Global Holdings amid reports that the securities firm is desperately trying to sell itself. Trading in MF Global's shares is also halted.

The Wall Street Journal reported Monday that MF Global would seek Chapter 11 bankruptcy protection after investing $6 billion in sovereign bonds issued by European countries.

Jon Corzine, the former New Jersey governor who now leads MF Global, was working to find a buyer, according to several reports. The Journal said Interactive Brokers would bid $1 billion under a court-supervised auction.

MF Global shares plunged 66 percent last week. Its credit was dropped to "junk" status by several agencies, which cited concerns about the firm's exposure to European debt. It also reported its biggest-ever quarterly loss, $186.6 million, for the fiscal second quarter. MF Global blamed the loss weaker-than-expected trading revenue and one-time costs.

As for the holdings in debt from countries including Belgium, Italy, Spain, Portugal and Ireland, Corzine said he expected the firm to "successfully manage these exposures to what we believe will be a positive conclusion in December 2012."

The New York Stock Exchange halted trading in MF Global shares before the market opened Monday.

Until Monday, MF Global was among 22 companies considered financially secure enough to act as "primary dealers" for the Fed to sell US government debt.

The Federal Reserve Bank of New York said it suspended MF Global's status until it demonstrates that it still meets the Fed's standards for a primary dealer. The Fed could terminate MF Global's primary dealer status.